Strong financial foundation
Once again, even after the acquisition of Sanitec, the substantial contribution from free cashflow allowed the attractive dividend policy and the share buyback programme to be continued while also maintaining the very healthy financial foundation of the Group.
Total assets increased from CHF 2,431.5 million to CHF 3,553.8 million. This development was heavily influenced by the integration of Sanitec and the strong Swiss franc.
Liquid funds and marketable securities decreased from CHF 749.7 million to CHF 459.6 million. In addition, the Group had access to undrawn operating credit lines for the operating business of CHF 345.6 million. Debts increased substantially to CHF 1,139.2 million (previous year CHF 10.5 million). This resulted in net debt of CHF 679.6 million at the end of 2015, compared with net cash of CHF 739.2 million at the end of the previous year. This development was shaped by the financing of the Sanitec takeover, dividend payments to shareholders amounting to CHF 310.7 million and share buybacks totalling CHF 159.8 million.
Net working capital decreased from CHF 169.1 million to CHF 146.6 million compared to the previous year. Property, plant and equipment increased from CHF 550.9 million to CHF 715.4 million, while goodwill and intangible assets rose from CHF 645.3 million to CHF 1,757.1 million. These items – and the key figures in the following section – were heavily impacted by the Sanitec acquisition and integration.
The ratio of net debt to equity (gearing) increased from -43.0% in the previous year to +45.9%. The equity ratio reached a solid 41.7% (previous year 70.6%). Based on average equity, the adjusted1 return on equity (ROE) was 32.2%, the non-adjusted value of this ratio was 27.6% (previous year 29.2%). Average invested operating capital, comprising net working capital, property, plant and equipment, and goodwill and intangible assets amounted to CHF 2,504.9 million at the end of 2015 (previous year CHF 1,404.5 million). The adjusted return on invested capital (ROIC) was 20.1%, the non-adjusted value of this ratio was 17.0% (previous year 35.5%). For details on the non-adjusted gearing, ROE and ROIC calculations, please refer to the Financial Statements of the Geberit Group, Notes to the Consolidated Financial Statements, 5. Management of Capital.
The Geberit Group held 877,880 treasury shares on 31 December 2015, which equals 2.3% of the shares entered in the Commercial Register. Of these, 634,600 (1.7% of the shares entered in the Commercial Register) were acquired as part of the share buyback programme that started in 2014. The remaining 243,280 shares are mostly earmarked for share participation plans. The total number of shares entered in the Commercial Register stands at 37,798,427 shares. The aforementioned share buyback programme announced in March 2014 was launched on 30 April 2014. In the course of this programme, shares amounting to a total of a maximum of 5% of the share capital recorded in the Commercial Register were to be repurchased over a period of two years, less withholding tax, and cancelled by means of a capital reduction. The share buyback was suspended from July 2014 until March 2015 as a result of the ongoing Sanitec acquisition, and thus only around 2% of the share capital – or some 40% of the originally planned amount – was repurchased by the completion of the programme at the end of February 2016. A proposal will be submitted to the 2016 ordinary General Meeting to carry out a capital reduction in the amount of the total repurchased shares and to cancel the shares.
1 Adjusted: adjusted for costs in connection with the Sanitec acquisition (transaction, integration, and one-off financing costs as well as the amortisation of intangible assets and one-off costs resulting from the inventory revaluation)